Sunday, January 30, 2011

I've decided to apply and interview for an executive director position at a non-profit. While the role will be part time initially, I expect it become a full time job within a few months. I am willing to accept the position if the role is temporary, i.e. an interim executive director. My plan is to help find and transition to a permanent executive director by 2012.

Since this will likely to become a full time position, I acknowledge that taking the position would effectively take me out of retirement. However, to be clear, I do not have an offer at this time so I am not yet un-retired:-)

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial, retirement or career advice. Please consult a professional advisor.

Saturday, January 29, 2011

Last year, I worked in a government organization for the first time. In fact, I had two jobs: one with the federal government and one with a local government. Although both jobs were seasonal part time jobs, work at them confirmed many of my cynical beliefs about government. Here were some of my observations:

Ineffective management. In the federal government job, we were asked to sort the survey paper work multiple times, sometimes undoing the previous sort. One week, I resorted the same five boxes for four days because the information wasn't communicated between shifts.

In my local government job, there was a significant amount of record keeping which no one seemed to read. We were required to check off each task that was required to be done. One time, the day supervisor asked my why a task wasn't done correctly. I told him that the task was done by my co-worker to which he responded, "Oh, that's right." Of course, he should have already known if he had read the paperwork we filled out from the previous night.

Extremely generous retirement plan. Although the federal government job had no retirement benefits, I was eligible for the retirement plan in my local government job. The local retirement plan provided and annual retirement pay of 2.2% times years of service times the average of the 3 highest salary years. Thus, I can work part time for 27 years, work full time for 3 years and get a pension of 66% of the average salary for my 3 full time years. What a deal:-)

Able to increase taxes for more revenue. When my federal government organization was falling behind schedule, they simply got more budget to bring in more people to do the work. When the local government was running low on money because of previous spending choice, it simply put a tax levy on the ballot, which passed.

Indeed, I wasn't very impressed by either government organization in which I worked. My experience reinforced my belief that smaller government should be a focus of our elected officials. For reference, I won't be reapplying to work with either organization this year or in the future.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial, employment or career advice. Please consult a professional advisor.

Friday, January 28, 2011

I have been asked to consider becoming the executive director of a new non-profit organization. While I am not guaranteed the position, I know there is very short list of possible candidates. Here are some reasons that I am a good match:

Familiarity with the organization. Before I retired, I worked with founders to develop the predecessor organization to the non-profit by bringing to life the idea and the mission. Also, I know two of the trustees (1/2 of the board) since they are colleagues from my company. Finally, I have worked on several of the key elements of the non-profit's mission as part of my job with the company.

Strong non-profit experience. I have significant experience working in non-profits as a volunteer and I have been president of the board of trustees for two non-profit organizations. Based on my experience, I can help the non-profit put in place the right organizational elements. Also, I have a good network of contacts for non-profit work. Even though I have not done the executive director role, I understand the responsibilities of the position.

Reasonable cost. Although not working for free (as a volunteer), I am willing to work for about 50% of market rates. (Since the organization is new, keeping costs low initially is important.) My reason for accepting lower pay is that I want to job to be temporary, part time and not a career. Being paid market rates (or working for free) would probably lead to 40-60 hour work weeks.

Overall, I think I could be of great help to the non-profit. The position is a good match for my skills, experience and strengths. In addition, it would provide broad small business experience without having to own a small business.

My main concern is the time commitment, since I want to give family activities the highest priority. Also, I am enjoying the three seasonal part time jobs and the one volunteer job, and want to continue doing them. Before applying, I need to reconcile these potential conflicts.

For more on Reflections and Musings, check back every Friday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Thursday, January 27, 2011

Multitasking is a commom occurence today. Kids seem to handle multiple conversations in person, over the phone and on the computer. Adults are constantly driving and talking on the phone. Before the cell phone, it was driving and eating or driving and doing personal grooming. In the earlier days, it was driving and listening to music. For me, multitasking hasn't be very effective at getting multiple important tasks done well. The best I ever did was listen to music while doing my homework.

However, in Japan, I observed what I consider the most effective multitasking - doing something important while riding public transportation. During their ride on a train, many travelers were reading, checking the Internet or making calls. Thus, they got a lot of tasks done during the time of the hour plus commute each day. I realized that multitasking is best done by doing an important task during long dead times.

Although I no longer commute on the train, I realized that I still have similar downtime experiences that allow me to effectively multitask. For instance, someone is required to be at the bus stop when my daughter is dropped off. Fortunately, our home is right across from the bus stop. During the 15 minutes waiting for the bus, I prune trees, seed grass, dig up weeds,l water the lawn, or read my newspaper depending on the season. As a result, I do over an hour of productive yard work or reading each week while waiting for my daughter. To me this is great multitasking.

So far doing work while waiting at the bus stop is my only effective multitasking that I've confirmed. I'm working on another multitasking opportunity and I'll let readers know if it works in about another month.

For more on Crossing Generations, check back every Thursday for a new segment.

Wednesday, January 26, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" and am highlighting posts from the same week in 2007-2010.

Welcome to twenty-fifth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic.

For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized them into seven categories: Earning, Investing, Insuring and Protecting, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

“I would rather earn 1% off a 100 people's efforts than 100% of my own efforts.” John D. Rockefeller

Super Saver presents Thoughts on Becoming a Small Business Owner posted at My Wealth Builder, saying, "While it is appealing to start a business from scratch, I would likely buy an existing franchise business in which I had some experience. To me, this approach reduces the risk associated with starting a business."

Insuring and Protecting

"Who can hope to be safe? Who sufficiently cautious? Guard himself as he may, every moment's an ambush." ~Horace

The Financial Blogger presents Home Security System Type posted at Home Security System Canada, saying, "Which kind of home security system do I need? In fact, as technology evolves, there are tons of different home security system types. This article will guide you through them."

Investing

"If you cannot make money from one dollar--if you do not coax one dollar to work hard for you, you won't know how to make money out of one thousand dollars." ~ E. S. Kinnear

Silicon Valley Blogger presents How To Invest In Oil ETFs posted at The Digerati Life, saying, "This is a more exotic way to invest in ETFs, but it's an interesting angle to explore, especially if you're an adventurous investor."

Living Frugally

"Today, there are three kinds of people: the have's, the have-not's, and the have-not-paid-for-what-they-have's." ~ Earl Wilson

2 Cents presents The Real January Effect posted at Balance Junkie, saying, "The January Effect is part of stock market folklore, but I've found another January Effect that can be even better for your personal finances."

Monday, January 24, 2011

I consider myself a pretty good standardized test taker. As a sophomore in high school, I scored a 720 V and 760 M (out of 800) on the SAT in the time prior to the writing segment. More than 30 years after graduating, I scored a 33 (out of 36) composite on the ACT to qualify as a college test preparation tutor. In the past two years, I passed the tests to advance ten levels in my part time financial services job.

For reference, I'm not a genius. Instead, I do three things to maximize my score on standardized tests. Here are my strategies to do well:

Know the test design. Most standardized tests are designed to evaluate the test takers knowledge on a relatively narrow topic area under timed conditions. The type of answers be may multiple choice, open ended or essay format. Most tests are closed book, but some are open book.

To learn the design, I obtain copies of previous tests and practice. This gives me a good feel of what to expect on the actual test, including the common trap questions.

Study critical subject matter. Since the time for a test is limited, the content tested is also limited. Prior to a test, I study the topics more likely to be tested. Generally, practice tests give a good indication of the higher priority topics.

Use successful test strategies. Depending on the type of questions, I use different test strategies. For all tests, I do the questions I can answer quickly first and save the more involved questions for the end. In addition, I make sure I read and understand the question.

For multiple choice questions, I try to predict the answer and eliminate the obviously incorrect answers. For open ended questions, I work out the solution in detail to ensure I covered all points. For essay questions, I try to organize the piece in three part structure: introduction, supporting evidence, and conclusion.

Finally, I will always guess if there is no penalty for incorrect answers. If there is a penalty, I will only guess if I can eliminate at least one choice.

Of course, learning and knowing the subject matter is also very important. If I didn't already know arithmetic, algebra, and geometry, the above test strategies wouldn't help much in a standardized math test. However, when I do know the topic, the above test strategies typically help me maximize my scores.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or test taking advice. Please consult a professional advisor.

Sunday, January 23, 2011

Big Wave of Mortgage Resets May Not Be As Bad As Feared by CNBC.com reports that holders of adjustable rate mortgage (ARM) will benefit from the current low interest rate environment. Since mortgage interest rates are pegged to indices such as the interest rate of U.S. Treasuries or the London Interbank Offer Rate (LIBOR), many ARMs will be lowering interest rates versus 2006 to 2008, when the initial rate was set.

This is good news for people with ARMs who are still making their mortgage payments. Their monthly payment may be reduced depending on when they initially borrowed the funds. Thus, the number of mortgage defaults due to ARM resets are expected to be lower than originally predicted.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or mortgage advice. Please consult a professional advisor.

Saturday, January 22, 2011

One of my seasonal part time jobs is with a local office of a Fortune 500 company. When I took the job in 2007, I enjoyed the small company flexibility and the large company support structure. To me it was the best of both worlds.

Initially, the company was very open on how each individual did the work to provide good client services. This enabled me to focus on my strengths to do the work. Lately, the company been more prescriptive on how we execute the work. Instructions have been as detailed as the wording to be used when communicating with clients.

Having retired from a very large company, I fully understand why the formal systems are being deployed. Finding and implementing best practices is one way large companies create a competitive advantage. However, when I took this job, I didn't sign up for the role play training now required prior to each season nor the marketing projects that have been added to our priorities.

My reaction has been to significantly reduce the number of hours I work each week by 25-50%. So most of my time now is focused on working with clients, which I like, and minimal time is devoted to the corporate requirements, which I complete as needed. This way, I still get to spend the majority of my time on the elements of the work that I enjoy the most.

Unfortunately, I believe the company will continue the transition to large company systematization. Therefore, I probably will only last 1-2 more seasons before deciding working in this job isn't sufficiently enjoyable anymore.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial, retirement or career advice. Please consult a professional advisor.

Friday, January 21, 2011

In the past week, I have been asked by contacts to consider a couple of job opportunities. The upside is the work is interesting, either starting up a non-profit career development organization or helping build an R&D organization in an emerging market. Unfortunately, the time commitment is either permanent part-time or full time for a couple years which is more than I want to do at this time.

For reference, no offer of a position has been made to me. As I suggested in Turn Down Offers, Not Opportunities, I will give both opportunities consideration and get more information. Perhaps, I will even submit an application. Of course, I won't need to make a decision until there is an offer, which I rate as low probability event at this time :-)

For more on Reaping the Rewards, check back every Friday for a new segment.This is not financial, retirement or career advice. Please consult a professional advisor.

Thursday, January 20, 2011

I've played organized sports since I was 8 years old - 13 years of football, 7 years of rugby, 6 years of baseball, 3 years of tennis, and 2 years of track. Although I haven't played a team sport since 30, I value the lessons I had from the experience. Here are a few of the lessons:

Do my best - I played hard in practice and on game day. Whether we won or lost, I gave the game my best.

Have fun - I wanted to enjoy the sports I was playing. If I didn't, I would finish the season and not play the following year. There were lots of things that made a sport fun: camaraderie, playing, exercise and learning.

Be a good winner - Win gracefully. Enjoy the win and don't taunt opponents, celebrate too much or become over confident.

Rebound from setbacks - After a loss, there is always tomorrow, next week or next year. Don't become too concerned with a specific loss or setback..

My best sports experience was high school football. I became one of two first freshmen starters on a varsity football team in our county, on a team that went 2-7-1. After that tough start, we rebounded. In the succeeding years, we were 7-2-1, 11-2 (state runner-up), 11-1 (state champions). Each year reinforced the above lessons and gave me memories that I will never forget.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or sports advice. Please consult a professional advisor.

Wednesday, January 19, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" and am highlighting posts from the same week in 2007-2010.

Signalling Wealth - Nicer cars, nicer houses, nicer clothing etc. are just some of the ways one can signal wealth to one's peers. Since it is part of human nature to seek status in one's community, I am not immune to participating. For most things, we choose to buy only what we need and signalling wealth happens in a few areas for us.

I Won't Pay To Use My Own Money - I absolutely hate paying fees to use my own money. A few dollars here and there can add up to lots of money. My preferred approach is to find solutions that require no fee.

2009

How Saving has Enabled Us - Our savings has enabled a lot of what we like to do. It's one of the reasons that I made paying myself first a part of our financial strategies.

Driving Like Worms - Here's how I grumble at people who drive expensive sports cars and stall while making a left turn :-)

Welcome to twenty-fourth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic.

For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized them into seven categories: Earning, Investing, Insuring and Protecting, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

“If you don't want to work you have to work to earn enough money so that you won't have to work.” Ogden Nash

Investing

Dividends4Life presents 2 Dividend Stocks Building Future Yield and 10 Going Ex-Dividend in January posted at Dividends Value, saying, "Driven by computers that cost more than the average person will earn in their lifetime the investment markets move at light speed. To keep pace hedge funds, mutual funds, institutional investors and multi-billion dollar money managers spend large sums of money on high-tech tools to give them an edge. So, what chance does a small individual investor have?"

Aussie Investor presents Highest Dividend Paying Stocks In The ASX100 posted at Australian Investing, saying, "It might surprise you to learn that over the long term dividends make up a large part of a share portfolio's returns. And for retirees, dividends are the life blood of their investment portfolio. While growth in the value of the portfolio is important in order to keep pace with inflation, it is the steady stream of dividends which pays the bills. So which stocks have the best yield?"

Living Frugally

"I have learnt to seek my happiness in limiting my desires, rather than attempting to satisfy them." ~ John Stuart Mill

Boomer presents Why I Cancelled My Gym Membership posted at Boomer & Echo, saying, "I thought I was stuck with this monthly fee until the contract expired, or else I would be faced with a huge penalty for cancelling our gym membership."

freefrombroke presents Free Online Checking Accounts posted at Free From Broke, saying, "With the fees that traditional banks have been adding to checking accounts lately, we need an alternative. Check out some free online checking accounts and the benefits they provide."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Sunday, January 16, 2011

Our plan is to put more funds into equities in 2011. First, I expect the economy to continue to strengthen. Second, I expect unemployment to decline as companies increase hiring and extended unemployment benefits expire. Third, I believe government will be more centrist and business friendly. Finally, individual investors are moving back into the market.

Although we've already been trickling funds into stocks, my plan was to wait until the Dow reached 12,000 before adding significant funds. However, the Dow closing at 11,787 on Friday is close enough for us to start purchasing equities.

Up until now, I have focused mainly on dividend paying stocks which we will continue to do. In the last two weeks, we purchased shares of Merck (MRK) and Pfizer (PFE) which pay dividends of a little over 4%. For 2011, we have expanded our focus to other large cap growth stocks. Last week, we purchased share of Ford (F) and Citigroup (C) sine I expect autos and financials to benefit significantly from the continued recovery. Also, we purchased Baidu (BIDU) to get more exposure in the developing markets. Finally, we plan to buy more shares of General Electiric (GE) which I consider a high dividend stock and a financial stock.

Is it too late to get into the stock market? I don't think so. Even though the Dow is up 78% from the bottom, it is still 19.5% below the all time high, which I think may be surpassed in 2011.

Disclosure: As time of publication, we own shares of Merck, Pfizer, Ford, Citigroup, Baidu and General Electric in our trading accounts.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Saturday, January 15, 2011

For most of my adult life, I lived in same city and paid city taxes. When I was temporarily transferred, we sold our house. When we returned, we purchased a home outside of the city limits. Here were our reasons:

Increasing taxes and declining services - During the the 18 years that we owned a house, our property taxes increased six fold without any improvements in city or education services. Despite school enrollment declining, school tax levies were a regular ballot item. (I never did figure out why more money was needed to educate fewer students.) In addition, basic city services such as snow removal were reduced. For example, my street went from being plowed on the first day of snow to two to four days later.

Increasing crime - When I first moved here, most of the city was relatively safe including the inner city. However, the frequency of crime has increased in all city neighborhoods. Just before we moved out, our home someone kicked in our back door and stole our cash and jewelry. Recently, break ins in our previous neighborhood have occurred while the occupants were home.

Declining schools - Both my spouse and I had public school educations. We always planned to send our children to public school. With the exception of one magnet school, the city public schools had a poor reputation.

Our choice to move outside the city has been a good one. For about the same amount of property tax, we have better services, much less crime, and significantly better schools. For example, our streets our plowed within hours of the first snow and our high school is regularly included among the top schools nationally. In addition, our current municipality does not tax wage earnings.

To me, me it's no surprise that the city population is declining, while the suburban population is growing. The city politicians just don't seem to get it. Like some others, the city is considering raising taxes to cover budget shortfalls and unfunded pension liabilities. I'm very glad we have already voted with our feet.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial, tax or policy advice. Please consult a professional advisor.

Friday, January 14, 2011

Golf is often viewed at the premier retirement sport. It can easily be played by seniors and physical assistance can be provide by golf carts. However, after playing golf as a volunteer job, I've decided that golf won't be one of my retirement sports. Here are the reasons:

Too much time commitment - Based on my volunteer experience, I would need to play at least one time a week to be competent. A dedicated golfer I know thinks two to three times a week is needed. Nine holes of golf takes about 3 hours after I include driving time. In addition, I would need practice time and lessons. I just don't want to commit that much time, effort or mind space to a sport.

Cost is too high - For many sports, I can play almost for free after an initial investment. For example, I can play tennis for free at local park courts. I can jog or ride my bike for free in my neighborhood. I can also play pick-up basket ball (poorly) for free. However, golf costs about $20-$30 to play on the inexpensive public courses. It can be double or triple that amount on private courses. In addition, it costs $5 to $10 to practice on a driving range. Fortunately, the cost of a round and the cart are complementary in my volunteer job.

At this time, tennis is my retirement sport of choice. I can usually play on an ad hoc basis for no more that the cost of a can of balls. Even the neighborhood tennis league in which I play only costs $7 per night including the balls and a first round of beer. Also, playing tennis only requires an 1-1/2 hour time commitment to complete a couple sets.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial, health or retirement advice. Please consult a professional advisor.

Thursday, January 13, 2011

Since our daughter turned six, I've seen a significant advance in her psychological, physical and academic skills versus last year. Here are some of the differences I've seen:

Amusement park rides - It used to be a major ordeal to get our daughter to try an amusement park ride. They were all too "scary." Now, she is open to all the rides that were formerly "too scary," and she is interested in rides that I prefer not to do:-)

Sledding - Previously, my spouse would have to cajole our daughter to go sledding. In addition, we would need to pull her up the hill on a sled. This year, our daughter goes down the hills, including the big ones, by herself. She also scampers back up the hill on her own. Hopefully, she will be able to pull the sled up by herself next year:-)

Soccer - Our daughter has evolved from a lurker to one of the lead players. Finally, she understands the other team won't just let her kick the ball unopposed. She scored her first goal last season.

Academics - I impressed with how much our daughter has learned in the first half of kindergarten. She can read at a 2nd grade level, write short words, and do simple addition and subtracting. A lot of credit goes to my spouse for helping our daughter practice at home.

To me, the transformation from last year is amazing. My ongoing joke is that our daughter was holding back so that we didn't put too much pressure on her:-) However, I must admit, my spouse was definitely right on holding our daughter back from kindergarten. The extra year of growing up has definitely made a difference.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Wednesday, January 12, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" and am highlighting posts from the same week in 2007-2010.

2007

Retire From Your Job, Not Life. - In today's world, there is more opportunity to do more after retirement. Especially, if one has planned well financially.

Creating A Safety Net For Job Loss - Losing a job could happen to anybody. When I was working, these were some strategies for protecting myself and my family for this risk.

I Don't Complain, Instead I Don't Return - It used to be if I received bad service, I would take the time to fill out a complaint card and let the establishment know. However, I no longer do that. Now if the business gives me bad service, I just stop going.

Welcome to twenty-third edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic.

For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized them into seven categories: Earning, Investing, Insuring and Protecting, Living Frugally, Retiring, Saving and Taxes.

And now onto the Carnival:

Earning

"There are three ingredients to the good life; learning, earning, and yearning.” Christopher Morley

Sam presents NEW !! Demand is Exploding for These Careers. Check Out These Salaries posted at Surfer Sam and Friends, saying, " It helps to know which careers are in strong demand, and what salary you can expect. The Bureau of Labor Statistics provides a 10-year forecast of positions and job descriptions where employment opportunities are expected to grow. These jobs pay well, and offer you what people look for, job satisfaction, opportunities for promotion and job security. Many careers are in the fast-growing fields of technology, health care, management, engineering, construction and sales. Can you see one of these careers in your future?"

Dividends4Life presents 10 Stocks Expected to Grow Their Dividends in 2011 posted at Dividends Value, saying, "In this space we normally look at companies that have recently raised their dividends. However, as the year draws to a close there were very few companies of note increasing their dividends this week. With that, I thought it would be interesting to see who were the big dividend raisers in 2010 and what we might see in 2011. Here are ten companies for your consideration:"

Boomer presents Perfect Asset Allocation Doesn’t Exist posted at Boomer & Echo, saying, "Index investors are constantly fine-tuning their asset mix to achieve the perfect balance. In reality, does all of this diversification and re-balancing protect you in a bear market?"

Aussie Investor presents Best Shares To Buy In 2011 posted at Australian Investing, saying, "With 2010 out of the way, it's now time to turn our our attention to 2011. While I'm sure we'd all like to have a crystal ball which we could look into to see what shares prices have done up to the end of 2011, the reality is the future is unknown. So where do we look for the best shares to add to our investment portfolios in 2011?"

Value Indexer presents Facebook's 100x valuation is pure growth speculation posted at The Value Indexer Blog, saying, "This analyzes something that has been in the news recently to see what concepts we can learn and apply to other investments. Although it's more in the advanced end of the range I believe it still fits for readers who would have been interested in the Monte Carlo and gold bubble posts in the most recent carnival."

Living Frugally

"Without frugality none can be rich, and with it very few would be poor." ~ Samuel Johnson

MoneyNing presents Winter On a Budget posted at Money Ning, saying, "Here are a few ways to spend the winter on a budget. How do you save money?"

Retiring

"Retirement is like a long vacation in Las Vegas. The goal is to enjoy it to the fullest, but not so fully that you run out of money." ~Jonathan Clements

Saving

"All days are not same. Save for a rainy day. When you don't work, savings will work for you." ~ M.K. Soni

Prince of Thrift presents Why Should Everyone Pay Off The Mortgage Early posted at Becoming & Staying Debt Free, saying, "Ever since I started listening to John Cummuta and Dave Ramsey, I keep hearing people say but, 'I don't want to pay off my house. I would lose my tax deduction on mortgage interest. Besides I can invest the extra money and earn more money.' I say Horse Hockey!"

Taxes

"The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing." ~ attributed to Jean Baptist Colbert

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Monday, January 10, 2011

Recently, I have been giving some thought on an approach to becoming a small business owner. While it is appealing to start a business from scratch, I would likely buy an existing franchise business in which I had some experience. To me, this approach reduces the risk associated with starting a business. Here are the reasons I believe this approach would improve the probability of business success for me:

Large company support structure - A franchise offers access to excellent models, successful processes and expert networks, all at a corporate level. The success of the business is not primarily dependent on my business acumen. I would also have the immediate benefit of the knowledge and best practices of a large company which would take me years to develop on my own.

Known customer base - From what I've observed, finding and retaining customers is the primarily challenge for a business. An existing business would already have customers as the starting base. Thus, there is a confirmed revenue stream. A new business would have zero customers as the starting point. Revenue starts at zero, which means a new business is generally losing money after all the start-up costs.

Practical knowledge of the business - Have experience in the business gives me a better understanding of what is important to be successful, especially on hiring good employees and doing good local marketing.

Currently, I am working three part time jobs in which there are franchise ownership opportunities. While I enjoy all three jobs, I only have interest a owning a franchise for one of the businesses. I have worked in the business three years, developed personal expertise, know the customer base and understand the challenges. Based on my analysis, I believe there would be an excellent return from owning and running a franchise. Unfortunately, that company has made all of their nearby locations corporate establishments, which would require me to travel a long distance to own a franchise.

For now, I will continue work as an employee for all three companies, including the corporate owned business. However, should the corporate owned location be converted to a franchise, I would strongly consider making an offer.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or career advice. Please consult a professional advisor.

Sunday, January 09, 2011

In 2010, the Dogs of the Dow investing strategy returned 16.25% beating the Dow 30 index which returned 9.47%. This is only the second time since 2003 that the Dogs of the Dow strategy has beat the index significantly. For more details, see the Dogs of the Dow performance tables. 2011 Dogs of the Dow at CNBC.com shares the list of the 2011 Dogs and shows the 2010 Dogs results.

For reference, the Dogs of the Dow strategy is a contrarian investing approach. The strategy is based on investing equal amounts in the 10 highest yielding Dow 30 stocks since these price of these stocks have been beaten down. The assumption is that companies in the Dow 30 have sufficient financial and corporate strength to recover from short term business declines. However, the recent economic crisis showed that Dow stocks are not immune to disaster as former Dow stocks General Motors and Citigroup have demonstrated.

Will the 2011 Dogs of the Dow also beat the Dow 30 index? I expect that the Dogs will do well as the economy continues to strengthen. However, my focus will be on one segment of the Dog stocks, the health care sector which includes Pfizer (PFE), Merck (MRK) and Johnson & Johnson (JNJ). Health care stocks have been beaten down due to the passage the Health Care bill. I believe these stocks will do much better in 2011 as the impact of the health care bill becomes more clear. Also, these stocks pay a 3.5% to 4.5% dividend which provides a good return while waiting for recovery.

Disclosure: At time of publication, we own Pfizer in our trading account.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Saturday, January 08, 2011

Prior to early retirement, I typically worked the long hours and within the times specified for the job. In 2010, I had an important revelation about my part time jobs: I can work the hours convenient for me. The epiphany came while working at two seasonal government jobs. I quickly realized that after completing the 2010 season, I had no interest in working these jobs in the future. However, since I was committed to complete the term of the job, I reduced my hours of availability to only the exact hours I wanted to work. Much to my surprise, both organizations showed flexibility and worked around my requested schedule.

The success in influencing my schedule at the government part time jobs caused me to try the same approach at the three part time jobs that I planned to work in 2011. I was pleasantly surprised again. In each case, the organization has been flexible and worked around the exact schedule I requested. Thus, I plan to teach at my daughter's school (1 hour per week for 20 weeks), tutor high school students (4-10 hours a week), and do a seasonal financial services job (average 15 hours a week for 15 weeks). Although, there might be one or two weeks where I work 40 hours, my planned schedule should keep me from being over committed to part time jobs that happened in the summer of 2010.

For now, my 2011 work schedule feels like the right balance between part time work and personal time. If I still feel I'm working too much, I will eliminate or further reduce my hours in the financial services job in 2012.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial, retirement or career advice. Please consult a professional advisor.

Friday, January 07, 2011

In Senior Discounts Begin at 50, I posted about establiments that provide discounts to senior shoppers at age 50 , even though most senior discounts occur at 55, 62, or 65. Tonight, I am posting about another great senior discount: taking college courses at significantly discounted prices or even for free.

When I was in college, my Alma Mater allowed seniors to audit any course for a charge of $50. I thought this program was unique until I read Retirees: College Courses for the Taking on SmartMoney.com. The article reported that several universities, including some in the Ivy League, give seniors the opportunity to audit (take without credit) courses for a cost of $25 to $500 per semester.

I checked on a major university near us and learned that seniors 60 and older are able to audit courses for free. Since I retired early, I would enjoy returning to school for a few select courses when I turn 60. Attending for free makes it even better :-)

Form more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial, retirement or education advice. Please consult a professional advisor.

Wednesday, January 05, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" and am highlighting posts from the same week in 2006-2010.

2007

Trusts, Wills and Other Estate Matters - We didn't seriously consider getting all our estate planning papers in place until we were transferred on an international assignment. Here are the documents we created.

Welcome to twenty-second edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic.

For reading convenience, I have listed the posts with a brief summary or comment by the submitter and organized them into seven categories: Earning, Investing, Insuring and Protecting, Living Frugally, Retiring, Saving and Taxes.

Boomer presents Do You Need Financial Advice? posted at Boomer & Echo, saying, "There are many ways to get the advice you need depending on the size and complexity of your portfolio and whether or not you want to give up full or partial control."

Dividends4Life presents 6 Stocks Giving The Gift of Dividend Growth posted at Dividends Value, saying, "Christmas is a time of giving. Families and loved-ones give gifts to each other. People give money to the needy and charities, while others give their time to help those that are not quite as fortunate. It seems that everyone is involved in giving this time of year, even corporations. Dividend growth stocks give a gift that keeps on giving – ever increasing dividends!"

Aussie Investor presents Australian Stock Market Investing Blog - Buying Shares As Long Term Investments posted at Australian Investing, saying, "So you've managed to save a little extra money. You know that to make it grow you'll need to consider some other investment options beyond term deposits and online savings accounts. You've heard that buying shares is one of the investment options you should consider - but what's the next step? This article discusses how to get started if you want to buy shares as an investment."

FIRE Getters presents Personal Loans - How to Borrow Money Responsibly? posted at FIRE Finance, saying, "Nowadays it is normal for the average person to have some sort of debt, whether it be school loans, a mortgage, or credit cards. After all, this is the day in age in which people are living beyond their means (according to financial experts). But is all debt bad? How much is too much? And how do you know if you are borrowing responsibly?"

Retiring

"The question isn't at what age I want to retire, it's at what income." ~ George Foreman

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Monday, January 03, 2011

Here is our Q4 2010 Wealth Builder Ratios update. During the fourth quarter of 2010, the Dow, Nasdaq and S&P500 indices continued to rally and advanced 7.3%,12.0% and 10.2% respectively. Our investment portfolio returns were in the middle at 9.9%. My company stock had its best advance in 2010 with a 7.4% return during Q4.

2010 was a tumultuous and good year. This year is the first positive return for our portfolio since 2007. After a positive start in Q1, 2010 turned negative and then was positive again. We have gone from a 0.77 gain to a 0.41 loss and then back to a 1.29 gain. A large cash position has helped on the downside but not on the updside. The position in my company stock was a significant factor, accounting for 58% of the gain this year.

For 2011, as my company stock (hopefully) advances, we plan to sell some shares and increase diversification, primarily in large cap dividend paying stocks.

Savings to Salary

Target>202007=23 2008=16.7 2009=15.3

15.1

16.6

For now, it feels like our retirement savings have stabilized which gives me some confidence of better returns coming.The Q4 savings ratio of 16.6 is comparable to the Q4 2008 even though we paid off our mortgage using about 1.4x of my salary. Excluding the mortgage payoff and accounting for monthly payments, our savings ratio would have be about 17.7

(For reference, Salary refers to gross salary just prior to early retirement in October, 2007.)

Both #1 and #2 were directlycorrelated with how well our stock, bond, and CD investments returns. With the good performance of my company stock and the high proportion of cash, our portfolio basically matched the indices Q3.

It has been very challenging retiring at the beginning of a bear market. Our short term expenses (next 3-5 years) are invested in CDs, bonds and money markets. So we can wait for the stock market to continue an upward trend, hopefully through 2012. I continue to be concerned about volatility of our investment portfolio, but believe there is more upside than downside potential going forward.

I continue to have the same financial goals for 2011. Hopefully, the markets will continue to rebound in 2011, and allow our retirement investments to further recover.

For more on Strategies and Plans, check back every Monday for a new segment.

About Me

My wealth goal is to create a guaranteed yearly income stream equal to my highest salary for my retirement years. While I have developed a strategy to do this,
I am interested how others are thinking of achieving financial security for retirement.
This blog is a summary of facts, ideas, discussions, and action plans to achieve that goal.

Disclaimer

This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.

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Disclaimer:
This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results
based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.